For the first time in history, Meriden voters approved a budget referendum sending the city budget back to the Meriden City Council with a message to cut taxes.
When asked for suggested areas to cut, the leader of the movement, Michael Carabetta, said “cut 2-3 percent from each department.” This sounds reasonable on the surface, but once you dig into the reality of the budget you quickly find it’s not so simple.
I speak from experience, having served as a city councilor and mayor over a 23-year span (1989-2013). I have seen good budget years and lean budget years over the past two decades.
During the Mayor Joe Marinan era (1993-2001), there were several years in a row of no-tax increases and some people became accustomed to the idea that a “no tax increase” was the normal thing for a city our size. But these lack of tax increases was accomplished by underfunding the city’s pension obligations (similar to what happened at the state level and the resultant fiscal mess we are in now). After several years of this approach, there needed to be a whopping tax increase to catch up.
When city manager Larry Kendzior arrived on the scene 13 years ago, he made the budget his top priority by working with the council to pare expenses and fund the pension obligations at higher levels. He also tried to present as lean a city budget as possible to the council.
These changes stabilized the city’s fiscal position and improved the city’s bond rating (which led to a decrease of millions of dollars in future bond interest payments).
This approach made sure that the city would no longer fall prey to a kicking-the can-down-the-road approach to budgeting. The end result was budgets that were fiscally sound and prudent. City departments were downsized, staff positions eliminated or combined, starting pay scales were reduced, and pension benefits were lowered.
The Board of Education was flat-funded for several years. Modest annual tax increases assured that basic city services remained intact.
This disciplined approach was adopted by the City Council Finance Committee which has the responsibility for reviewing and approving each departmental annual budget, line by line.
The committee meets with each department, holds public hearings, and ultimately recommends a final budget to the city council and mayor to vote upon. This is no rubber-stamp process as each line item is closely scrutinized and must be justified. Throughout the process, any city councilor may offer amendments for cuts or increases.
Some budget expenses are not subject to control, for example: the snow account, healthcare increases, bonded indebtedness, and contractual salaries (determined by binding arbitration and voted upon as contracts expire).
Once the Finance Committee completes its work, the budget is delivered to the full city council for a vote and to set the mill rate. (The mayor then has 5 days to veto any line item.)
In most years, the city budget has been approved on a bipartisan basis. But sometimes the minority/opposition party plays a “little game” at budget time.
They go along with the budget at the committee level but vote against the final budget. This allows them to say to the voters that they voted against the budget and any resultant tax increase. Yet they rarely, if ever, propose their own budget, thereby getting the best of both worlds by not voting for the budget but also not putting forth areas to cut.
This is one of those “little game” years, but we will all get to see what cuts they will offer to reduce the budget and mill rate.
To reduce taxes, major budget cuts will have to be made. It will take $5.3 million in cuts for a no-tax increase. Make no mistake, this will have a significant impact. It’s a simple fact: less funding means fewer or diminished city services. This promises to be a difficult balancing act.
I don’t envy the council and mayor for the task ahead. We are seeing declining revenues from the state together with higher costs for energy, healthcare, and contractual wage increases.
We have mandated minimum manpower at the fire houses and we demand fast, dependable public safety from our police department.
The education budget (which makes up over half the city budget) is largely exempt from cuts due to state mandates.
Now is the time for the public to voice its priorities for cuts to departments and services. (By the way, there is no budget item for “fat and waste” as the answer to the budget problems, as some critics recommend.)
With the referendum vote, the easy part is over. Now the hard work begins.
Michael S. Rohde is a former mayor and city councilor of Meriden.